Top Reasons to Nearshore Software Development

Published
June 5, 2023
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Discover the many benefits of nearshoring software development

Developing software applications is an expensive business. First, there’s the cost of the hardware, software, and security. Then, there’s the cost of hiring and managing qualified employees. It’s not a small business mountain to climb, but it is a potentially profitable one.

We live in a world run by technology. As it grows, so do the business opportunities for application software development. With the success of globalization and remote working, there’s no limit to where a business can find qualified talent.  

Nearshoring is a type of outsourcing that takes advantage of geographical location, language, and time zones. For US-based companies, nearshoring means utilizing resources in Canada, Mexico, and Latin America. Nearshoring allows software development businesses to get quality work to the market at a lower cost.

This guide explains what nearshoring is, its advantages and benefits for businesses, and what to look for in a nearshoring software engineering partner.

Advantages and benefits of nearshore software development

Nearshoring offers significant advantages, including operating in the same or close time zone, and fewer communication barriers, which makes for a team that can solve problems productively and timely. Teams that work in nearby time zones experience less interruption. Nearshoring reduces the amount of lost time due to communication and language barriers.

Many nearshore development teams turn into development machines. Businesses benefit from building a dedicated and productive team that is experienced and consistent. Additionally, nearshoring teams are highly scalable. No need to hire or train - simply request the expertise and skills you need and get the position filled by your nearshore provider. In this way, businesses can benefit from the nearshoring provider delivering an experienced team, so less time is spent getting up to speed.

Businesses using nearshoring for software engineering get quality products to market while simultaneously moving the business forward. No need to worry about managing software development teams and release schedules. Don’t want to nearshore the entire development team? Nearshoring provides benefits for staff augmentation as well. Add to your onshore team or create a nearshore team for specific development functions like maintenance or modernizing legacy systems.

Many businesses keep the web development onshore and use nearshoring to create mobile solutions or vice versa. Some use nearshore teams to perform maintenance, so onshore teams can focus on new development only. You can arrange onshore and nearshore teams in any number of combinations. Each one produces an integrated team capable of working productively and effectively on any project.  

Nearshoring’s efficiency and cost savings

Nearshoring and offshoring are both more affordable when compared to onshore or in-house development. Granted, the term affordable has various meanings. Nearshoring is affordable but not cheap. Nearshoring providers keep themselves affordable by adjusting fees and team sizes to meet customer’s budget. Pricing models can vary depending on a customer’s needs.

Nearshoring allows small and medium businesses to compete successfully in the software application development space. The challenge for businesses interested in nearshoring is to find a provider that balances expertise and availability with price and service quality.

Nearshoring also boasts the advantages of being near enough to share similar cultural beliefs. Sharing a similar cultural mindset fosters increased communication quality. Simply put, people from similar cultures understand each other. There are typically differences, but they don’t cause the same amount of miscommunication or misunderstandings that lead to poor product quality and lost development time.

The time zone impact is real. Ever tried scheduling a development design meeting with 12 people in 10 different countries over 6 time zones? It’s next to impossible without several team members having to meet during overnight hours. Using nearshoring eliminates the need to coordinate across time zones. Team collaboration becomes easier and less disruptive. Communicating is easier across nearby time zones.

Nearshoring is advantageous for tapping the global talent pool. Experienced technology professionals are hard to come by. Nearshoring helps bridge the gap for companies looking to get a quality application on the market cost-effective at a rapid pace. Nearshoring providers help by providing and building teams that have the expertise software development companies need without the pain of hiring and managing an in-house team.

Best practices for selecting a nearshore development partner

Selecting the right partner is critical for nearshoring success. First, create a list of reputable nearshore providers based in your country. In other words, if your business is in the US, start with a list of US-based providers. Why? US-based providers can get started faster.

You can meet up and design the team in person rather than over a video or phone call. Many nearshoring providers offer local customer service or management teams you can work with in person. Communication happens in real time between your business leaders and the local provider leader.

Look for nearshore providers with experience working in your industry. Having a nearshoring partner who understands the quirks of an industry helps keep products compliant with industry standards and regulatory requirements. Additionally, a team with industry experience is better equipped to design and code an application that works for your business needs.

Ask the nearshoring providers on your list for retention rate numbers and references. Don’t be shy, and don’t rely on online reviews. Take the time to talk to active or past clients. Find out where there were issues, how they were resolved, and at what level of quality. Look at products produced by nearshoring teams – do they fit your needs? Are they high enough quality?  

Confirm the nearshoring provider has an office or worksite suitable for employees. Successful software development requires a significant reliance on technology, including secure internet access, computers, licensed software, and a clean, safe workplace. Regardless of a person’s circumstances, everyone needs a safe and solid workplace environment. Ensure the nearshoring team has what it needs to succeed.

Don’t forget to assess risk and manage it. Ensure all legal documents and contracts are reviewed by a qualified attorney. Also, consider getting Errors and Omissions (E&O) insurance if your business is based in the US. Proper contracts and service level agreements (SLAs) ensure a smoother, more manageable business partnership.

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